Mohamed Hwej, the Minister of Economy and Trade in the Aldabaiba government, has referred to the government his proposals for alternatives to replace fuel subsidies with direct cash payments to citizens.
The Ministry said that one of the advantages of monetary subsidies is to achieve the principle of consumer sovereignty and freedom to determine their priorities, and do away with the need for administrative costs, and avoid price distortions in subsidies. They would also end fuel smuggling, illicit trade and their negative consequences on the Libyan citizen and state.
The first proposal is to pay a direct cash subsidy, and the amount that will be allocated to support citizens is LD 888.6 dinars for each citizen annually, to be disbursed through the system of heads of families.
The second proposal is to replace the fuel subsidy with a social safety net, through which every citizen will receive LD 832 annually.
The third alternative is to gradually replace the fuel subsidy and pay cash to citizens, to compensate for the rise in fuel prices, amounting to LD 414 dinars, to be disbursed through smart cards.
The fourth alternative is to gradually replace fuels and pay cash to citizens on the basis of the equilibrium price for selling foreign exchange, so that the citizen receives cash payment of LD 427.
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